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Cos should take risk and banks must support them, says Minister

— Ramesh Sharma

The Minister of State for Mines, Mr T. Subbarami Reddy with the President, FIMI, Mr D.K. Sahni, at the annual general meeting of FIMI, in the Capital on Monday.

Our Bureau

New Delhi, July 9

The Government is concerned about the lack of initiatives being taken by domestic mining companies in gold and diamond explorations.

Speaking at the annual general meeting of the Federation of Indian Mineral Industries’ (FIMI) here on Monday, Mr T. Subbarami Reddy, Minister of State for Mines, said, “On an average Indians spend a whopping Rs 50,000 crore annually on the import of gold and diamonds. If domestic companies invested the same amount in explorations then the country could have saved considerable amount of money.”

According to him, companies are not coming forward in India because they do not have the appetite to take risks.

“Mining is a capital intensive sector and companies have to take a lot of risks for which even financial institutions have to come forward and support the companies,” Mr Reddy said.

He also said that the mineral royalty is likely to increase by more than Rs 2,000 crore as the Group of Ministers (GoM) has asked the Government to levy royalty on ad-valorem basis and share it with the States.

“As per the recommendations of the New Mineral Policy-2007, which was recently approved by the GoM, we are likely to switch over to the ad-valorem system for calculating mineral royalty. And once implemented, the royalty can go up to Rs 3,000 crore from the current Rs 900 crore,” Mr Reddy said.

The Union Cabinet had referred the mining policy to a GoM headed by the Home Minister, Mr Shivraj Patil, to address the issues facing both the steel and mining industries and recommend a policy conducive for overall growth of both the industries. The GoM has had consultations with both steel and mining sectors besides environment experts.

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